The Economic Times: India’s Economic Strength and Business Environment are of Strategic Importance to the US
The Economic Times
India’s economic strength and business environment are of strategic importance to the US
July 30, 2014
By John Kerry & Penny Pritzker
The long-standing partnership between the US and India is on the cusp of an historic transformation. Working together, the world’s oldest democracy and the world’s largest democracy can forge a new era of shared prosperity and security for hundreds of millions of people in India, across Asia and the world.
India’s rise will help the Indo-Pacific region become more stable, more prosperous and more free. The strategic choices India makes on how to grow its economy and promote regional security will directly impact Asia’s growth and US interests. As President Barack Obama has observed, America’s economy and security will increasingly be influenced by events in Asia. India’s economic strength and business environment are, therefore, of strategic importance to both our countries.
We are coming to India to deliver a single message: the US is prepared to be a full partner in this effort. We will work hand in hand with Prime Minister Narendra Modi and his government to promote open and liberal trade and investment, job training and closer strategic ties.
We are not starting from scratch. Since 2000, trade between our countries has increased nearly fivefold to more than $96 billion, Indian investment in the US has grown from just over $300 million to $9 billion, and US investment in India has risen from $2.4 billion to $28 billion. Ford is spending $1 billion to turn its new auto plant in Gujarat into a regional manufacturing hub. US subsidiaries of Indian-owned companies employ 45,000 people in the US. Citizens of both countries recognise the importance of our relationship. Half of all Indians see the US as their country’s “most dependable future ally”, according to a recent Pew poll. Similarly, a recent Gallup poll found that more Americans than ever have a favourable view of India.
The Next Chapter
We want to build on this strong foundation. We will focus on specific areas that are aligned with the priorities of India’s new government.
First, infrastructure. We will have astrong focus on this area during our strategic dialogue, reinforcing our joint efforts to create a business climate conducive to increasing US private sector participation in India’s infrastructure needs. We believe US companies can play a leading role in bringing cutting-edge technologies, equipment, capital, services and know-how to India.
Second, India and the US are rich in talent. By sharing best practices and skills in manufacturing, training and education, we can expand that talent together. India is already a centre of entrepreneurship with budding innovators. But we can expand practical programmes like vocational training, community colleges and healthcare industry skills. Some 1,00,000 Indian students are pursuing higher education degrees at American universities. Increasing our collaboration in these areas will strengthen both of our economies.
Third, creating a business climate that is open to global business and investment is key to unleashing India’s economic potential. Attracting investment, technology and know-how is essential to growth and requires all of us to have world-class, transparent and clear regulations that incentivise innovation by ensuring protection of intellectual property rights.
The development of competitive technology and manufacturing capabilities that integrate India into global supply chains will create far more employment than mandatory local-content requirements, which discourage foreign investment. Creating a level playing field will help India attract even more foreign investment, and help it boost growth.
In that regard, as we work with our trading partners around the world to advance trade and investment liberalisation, India must decide where it fits in the global trading system. Its commitment to a rulesbased trading order and its willingness to fulfil its obligations will be a key indication.
For India to fuel its economy, however, it must address its energy security needs. Fortunately, this is one of the most robust areas of our partnership. We will expand our partnership to leapfrog the limits of power grids and bring modern energy access to millions. We are expanding our work together to find competitive formulas for clean energy, including further cooperation on civilian nuclear power, renewable energy sources and supporting a regional energy network, that demonstrate how economic growth and the environment can be secured together.
Our strong and deepening partnership will continue on a series of fronts: from energy to higher education and climate change to joint military training and counter-proliferation efforts.
What’s more, programmes such as President Obama’s SelectUSA initiative, which connects foreign investors with opportunities in the US, can be powerful engines for global collaboration and integration.
We look forward to working with the governments and business leaders in India’s states. The leadership, entrepreneurship and competitive spirit we see in many Indian states augur well for the country’s economic transformation.
Our trip to India for the strategic dialogue — along with subsequent senior-level visits, including Prime Minister Modi’s prospective trip to Washington — signals our commitment to a bold and unequivocally affirmative partnership with India. Working together will mean more jobs for Indians and Americans, and it will help India achieve its full potential as a trade and investment centre of Asia. With this shared prosperity will come a shared security and a stronger partnership between our two great democracies.
(John Kerry is US secretary of state and Penny Pritzker is US secretary of commerce)